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DECREE

On the settlement of benefits of laborers in bankrupt enterprises and cooperatives

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 15, 2004 Bankruptcy Law;

Pursuant to the June 23, 1994 Labor Code and the April 2, 2002 Law Amending and Supplementing a Number of Articles of the Labor Code;

At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Article 1.- This Decree applies to laborers in enterprises, cooperatives and unions of cooperatives (hereinafter referred collectively to as enterprises and cooperatives) which have been declared bankrupt under decisions of competent people's courts defined in Article 7 of the June 15, 2004 Bankruptcy Law.

Article 2.- When enterprises or cooperatives are declared bankrupt under court decisions, the following debts related to laborers' benefits must be settled:

1. Money amounts owed by enterprises or cooperatives to laborers:

a/ Salaries and salary allowances (if any), which are any amounts left after advanced salary amounts are subtracted, owed by enterprises or cooperatives to laborers by the time the laborers leave their jobs;

b/ Severance allowances, meaning the amounts to be enjoyed by laborers under Clause 1, Article 42 of the Labor Code;

c/ Medical expenses, meaning the amounts to be paid by enterprises or cooperatives to laborers suffering from labor accidents or occupational diseases, covering from first-aid to treatment of laborers to stabilize their injuries or diseases, as provided for in Clause 2, Article 107 of the Labor Code;

d/ Compensations or allowances for labor accidents or occupational diseases, meaning the amounts to be paid by enterprises or cooperatives to laborers suffering working capacity reduction of 5% or more or to relatives of laborers who died of labor accidents or occupational diseases according to the provisions of Clause 3, Article 107 of the Labor Code, and Article 11 of the Government's Decree No. 06/CP of January 20, 1995, detailing a number of articles of the Labor Code regarding labor safety and sanitation, which was amended and supplemented under the Government's Decree No. 110/2002/ND-CP of December 27, 2002;

e/ Other benefits under collective agreements and labor contracts (if any), meaning benefits agreed upon by the two parties under such accords or contracts, which have not been paid yet or fully paid by enterprises or cooperatives to laborers.

2. Money amounts owed to social insurance agencies, meaning amounts not contributed yet or not yet fully contributed by enterprises or cooperatives to social insurance agencies according to the provisions of the Social Insurance Regulation.

Article 3.- When enterprises or cooperatives are declared bankrupt under court decisions, laborers shall be provided with a severance allowance, which is equal to half of a laborer's monthly salary plus salary allowance (if any) for each working year.

The working period for enjoyment of severance allowance shall be counted by the time the laborers leave their jobs according to the provisions of Clauses 3 and 5, Article 14 of the Government's Decree No. 44/2003/ND-CP of May 9, 2003, detailing and guiding the implementation of a number of articles of the Labor Code regarding labor contracts.

Salaries plus salary allowances (if any) for calculation of severance allowances shall comply with the provisions of Article 15 of the Government's Decree No. 114/2002/ND-CP of December 31, 2002, detailing and guiding the implementation of a number of articles of the Labor Code regarding salaries.

For laborers in state companies which went bankrupt in the effective duration of the Government's Decree No. 41/2002/ND-CP of April 11, 2002, on policies towards laborers redundant due to the reorganization of state enterprises, which was amended and supplemented under the Government's Decree No. 155/2004/ND-CP of August 10, 2004, they shall enjoy the regimes provided for in such Decree.

Article 4.- Laborers and creditors related to laborers' benefits shall have to file debt claims as provided for in Clause 1, Article 51 of the Bankruptcy Law, specifically as follows:

1. Laborers, including those under suspended labor contracts, shall fully declare debts owed to them by enterprises or cooperatives.

2. Enterprises or cooperatives shall fully declare debts owed to them by laborers.

3. Social insurance agencies shall make documents on debts owed to them by enterprises or cooperatives, with the latter's certification.

4. Debt-proving documents enclosed with debt claims include labor contract, collective labor agreement, enterprise's or cooperative's salary books, workday-marking table, sheet on pre-acceptance test of products or services, salary payment sheet, documents on receipt of social insurance contributions or payment of social insurance entitlements, and other relevant documents.

Article 5.- Debt payment plans

1. In cases where the remaining value of enterprises' or cooperatives' assets after the bankruptcy charges are subtracted is adequate for paying the debts specified in Article 2 of this Decree, the debts owed to each laborer and social insurance agency shall be fully paid.

2. In cases where the remaining value of enterprises' or cooperatives' assets after the bankruptcy charges are subtracted is inadequate for paying the debts, the debts owed to laborers and the social insurance agency by enterprises or cooperatives shall be paid in proportion.

Article 6.- When enterprises or cooperatives are declared bankrupt under court decisions, benefits of laborers suffering from labor accidents or occupational diseases shall be paid as follows:

1. If by the date of payment, laborers suffering from labor accidents or occupational diseases are already dead or have their injuries or diseases stabilized following medical treatment, with a medical examination council's conclusion on the level of working capacity reduction, the property management and liquidation groups shall make payment to the laborers or their relatives according to the provisions of Points c and d, Clause 1, Article 2 of this Decree.

2. If by the date of payment, laborers suffering from labor accidents or occupational diseases are still being under medical treatment, the property management and liquidation groups shall work with the medical establishments where the laborers are being treated in order to provisionally determine the treatment expenses and the level of the laborers' working capacity reduction. After calculating the money amounts specified at Points c and d, Clause 1, Article 2 of this Decree, the property management and liquidation groups shall transfer such amounts into the accounts of the Services of Labor, War Invalids and Social Affairs of provinces or cities where the enterprises or cooperatives are headquartered (hereinafter referred collectively to as provincial/municipal Services of Labor, War Invalids and Social Affairs) and authorize provincial/municipal Services of Labor, War Invalids and Social Affairs to make payment to the laborers upon completion of treatment and the conclusion of a medical examination council.

If laborers die or have their working capacity reduced by 5% or more as concluded by a medical examination council, provincial/municipal Services of Labor, War Invalids and Social Affairs shall make payment to the laborers or their relatives.

If the money amounts specified in Clause 2 of this Article are bigger than the amounts paid to laborers, provincial/municipal Services of Labor, War Invalids and Social Affairs shall return the remainder to owners of enterprises or cooperatives within 30 days after receiving the conclusions of the medical examination councils.

Article 7.- When enterprises or cooperatives are declared bankrupt under court decisions, laborers who are performing the military service obligation or other civil obligations and other laborers who are subject to suspension of labor contracts shall enjoy severance allowances according to the provisions of Article 3 of this Decree.

If by the date of payment, the laborers come to receive payments, the property management and liquidation groups shall make payment to the laborers. If by the date of payment, the laborers cannot come to receive payments, the property management and liquidation groups shall transfer the money into the accounts of provincial/municipal Services of Labor, War Invalids and Social Affairs and authorize the latter pay it to the laborers.

Article 8.- Payment of debts to laborers being held in custody or detention is made as follows:

1. When enterprises or cooperatives are declared bankrupt under court decisions, laborers being held in custody or detention shall be entitled to:

a/ Salary advances for the custody/detention duration before the date the enterprises or cooperatives are declared bankrupt under court decisions as provided for in Article 13 of the Government's Decree No. 114/2002/ND-CP of December 31, 2002, detailing and guiding the implementation of a number of articles of the Labor Code regarding salaries;

b/ Severance allowances specified in Article 3 of this Decree, except for those being held in custody or detention for acts of steal, embezzlement, disclosure of technological/business secrets or other acts causing serious damage to enterprises' property or interests.

2. If by the date of payment, the laborers are released after the end of the custody/detention duration, the property management and liquidation groups shall make payment to the laborers. If by the date of payment, the laborers are still being held in custody or detention, the property management and liquidation groups shall transfer the money amounts specified in Clause 1 of this Article into the accounts of the Services of Labor, War Invalids and Social Affairs of provinces or cities where the enterprises or cooperatives are headquartered and authorize the latter to make payment to the laborers who are released after the end of the custody or detention duration.

Article 9.- The property management and liquidation groups shall have to make lump-sum payment of debts to each laborer or his/her relatives according to the provisions of this Decree. In case of authorizing provincial/municipal Services of Labor, War Invalids and Social Affairs to make payment, they must send lists of laborers with the money amount payable to each laborer and transfer the money into the accounts according to the provisions of Articles 6, 7 and 8 of this Decree. For debts of social insurance contributions, the property management and liquidation groups shall transfer them into the accounts of the social insurance agencies where the enterprises or cooperatives make social insurance contributions.

Article 10.- Social insurance agencies where the enterprises or cooperatives make social insurance contributions shall have to pay social insurance benefits to laborers according to the provisions of the Social Insurance Regulation.

Article 11.- Provincial/municipal Services of Labor, War Invalids and Social Affairs shall coordinate with the Labor Federations of the same level in monitoring, examining and supervising the settlement of benefits of laborers in bankrupt enterprises and cooperatives operating in their respective localities, and perform the tasks authorized by the property management and liquidation groups according to the provisions of this Decree.

Article 12.- This Decree takes effect 15 days after its publication in "CONG BAO" and replaces the Government's Decree No. 92/CP of December 19, 1995, on the settlement of benefits of laborers in enterprises declared bankrupt.

Article 13.- Ministers, heads of ministerial-level agencies, heads of Government-attached agencies, presidents of provincial/municipal People's Committees, and concerned enterprises, organizations and individuals shall have to implement this Decree.

On behalf of the Government

Prime Minister
PHAN VAN KHAI